AN ABERDEEN company specialising in underwater vehicles and other subsea services to the offshore sector has gone into administration with the loss of dozens of jobs.
Specialist Subsea Services (S3), which had been trading since 2007 and was acquired by the Reef Group in 2009, had recently chartered a new vessel and bought new equipment, but rapidly ran out of cash as work in the sector declined in the aftermath of the collapse in oil prices.
Blair Nimmo and Geoff Jacobs of KPMG were appointed as administrators this week. They said there was “minimal work in progress” at the firm, giving them “no option other than to make 77 of the company’s 82 employees redundant with immediate effect”.
The remaining five employees have been retained to assist the administrators to realise the company’s assets and to help market the business and assets for sale.
S3 specialised in remotely operated underwater vehicles (ROVs), offshore survey, geotechnical and subsea intervention, including vessel operations.
It had recently undertaken the charter of an offshore support vessel, the EDT Hercules, and acquired two new ROV systems and related equipment.
The expansion significantly increased the company’s fixed-cost base which became difficult to service as work declined, resulting in cash flow difficulties.
Management had been seeking new investment and were progressing a restructuring exercise. They had secured a frame agreement with a major subsea engineering and construction company, but following the insolvency of S3’s parent company and largest customer, the company’s cash flow issues intensified and new investment could not be secured in time to meet its liabilities.
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